Sweaty Palms?

Electronic Waivers Revisited

January 15, 2014

John Wolohan Professor of Sports Law Department of Sport Management Syracuse University

We have all heard the warnings that waivers are not worth the paper they are printed on, and while it is true that some courts do not like waivers and will void them if possible, in must be noted that in at least 45 states a well-written waiver, signed by an adult, is the most effective tool available to sport and recreation providers and their employees against a negligence lawsuit. With the myth of the effectiveness of waivers still around, it is therefore not surprising that some sport and recreation providers are concerned about the legal impact of online or electronic waivers. For example, if a sport and recreation program requires its’ participants to go online and sign a waiver before being allowed to participate in the event, will it carry the same legal weight as off-line or traditional paper waivers?
The purpose of this article is to try and debunk the myth that online or electronic waivers carry less legal weight than other types of waivers. A good example of how the courts view online or electronic waivers is Moore v. Minnesota Baseball Instructional School, 2009 Minn. App. Unpub. LEXIS 299. During a summer baseball-instructional camp, operated by the Minnesota Baseball Instructional School (the School), one of the participants, T.J., sustained a permanent eye injury when he was struck by a woodchip thrown by another student. Since the injury happened off the baseball field, during lunch in one of the facility’s courtyards, T.J’s mother, Terry Moore, filed a claim of negligence against the School on behalf of his minor son. In defense of the lawsuit, the School argued that a waiver contained in the camp’s registration materials insulated it from liability.

On appeal to the Court of Appeals of Minnesota, Moore argued that the district court erred in granting summary judgment since there was a question as to whether T.J.’s mother actually signed the form containing the exculpatory clause. In support of this claim, Moore pointed to the fact that the School was unable to produce the actual document signed by T.J.’s mother. In addition, Moore also argued that even if the exculpatory clause did exist, and T.J.’s mother did sign it, the exculpatory clause violated public policy.
In reviewing, and rejecting, Moore’s first claim, the Court of Appeals held that even though the School was unable to produce the actual online enrollment form that T.J.’s mother filled out, based on the undisputed facts, there was no dispute that T.J.’s mother signed the form containing the waiver. In support of this conclusion, the court noted that the School was able to produce a document generated from archived enrollment data that indicates T.J. enrolled in the camp. The School was also able to produce a roster of children who participated in the camp, containing T.J.’s name. Since the only way a student’s name would show up on the list, and be allowed to participate in the camp, was if the emergency medical form was signed and returned to the School, the court concluded that T.J.’s mother must have signed the form containing the waiver.

As for Moore’s second argument, that since an injury from a thrown woodchip was not an inherent risk of playing baseball and therefore was not covered under the waiver, the Court of Appeals held that while this may be true, it is not important to the outcome of this case. A plain reading of the document, the Court of Appeals held, showed that the first time the word “activities” occurs in the document, it was used to describe “the activities that make up the School. It was not, the court held, limited to the activity of playing baseball; instead, it covered all of the activities encompassed by the School. Therefore, since lunch-break activities were part of the School, and T.J. was injured during the lunch break, the injury was covered under the exculpatory clause.

Finally, in reviewing Moore’s argument that the waiver violated public policy, the Court of Appeals held that in order to determine if the document violates public policy, Minnesota courts must use a two-prong test. The first prong examines whether there was a disparity of bargaining power between the parties, generally known as a contract of adhesion. The second prong examines the types of services being offered or provided, taking into consideration whether it is a public or essential service. While the Court of Appeals found that the waiver clause was part of a take-it-or-leave-it agreement and that T.J.’s mother had no ability to negotiate the agreement, the services offered, instructional baseball training, was not an educational activity, nor was it a service that was either of great importance to the public, or a practical necessity for some members of the public. Therefore, the court held the exculpatory clause did not violate public policy.

The decision by the Court of Appeals of Minnesota in Moore v. Minnesota Baseball Instructional School, 2009 Minn. App. Unpub. LEXIS 299, illustrates some important points that administrators can use to ensure that their organization is better protected. First, keep better records. This is especially true when a camper is injured and needs to go to a hospital. In such cases, the organization should not only have an accident report on file, but it should also anticipate a lawsuit and saved all documents and waivers in use at the time of the accident.

Second, as the Court of Appeals of Minnesota noted, when creating a waiver or the exculpatory clause, be sure that the language is broad enough to cover all the activities associated with your organization, not just the main activity. For example, if the exculpatory clause only covered baseball, the School would have lost. Finally, if possible, make sure that both the minor and his or her parents sign all forms. Once again, while the legality of the waiver against the minor in such cases may not stand up in court, a growing number of states that are willing to enforce them against the minor as well as his or her parents.

A CHECKLIST FOR WRITING AND USING ONLINE OR ELECTRONIC WAIVERS
Before considering online or electronic waivers, it is important for the reader to understand how the courts traditionally view waivers in the off-line world. Basically, a waiver is a contract in which the sport and recreation participant agrees to relinquish his or her right to sue the service provider in any event the participant is injured due to the providers negligence. When reviewing the legality of waivers, therefore, the courts will apply fundamental contract principals. With the development of the Internet and electronic contracts, the courts are using the same basic contract theories they developed for other forms of communication such as telegrams, mail and telephones. In addition to the basic elements of contract law, the enforceability of electronic waivers and other electronic contracts are also governed by two additional laws: the Electronic Signatures in Global and National Commerce Act (E-SIGN), at the national level, and the Uniform Electronic Transactions Act (UETA) at the state level.

E-SIGN, which was signed into law by President Clinton in 2000, is designed to provide legal protection to online or electronic contracts and give them the same weight as paper transactions. In particular the law sates that a “signature, contract, or other record relating to such transaction may not be denied legal effect, validity, or enforceability solely because it is in electronic form; and a contract relating to such transaction may not be denied legal effect, validity, or enforceability solely because an electronic signature or electronic record was used in its formation” 15 U.S.C. § 7001 (a) (1) & (2).

In addition to clarifying the legality of online or electronic contracts, E-SIGN also clarifies what constitutes an electronic signature. Under E-SIGN “the term “electronic signature” means an electronic sound, symbol, or process, attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record” 15 U.S.C. § 7006 (5).

Therefore, when sport and recreation providers ask participants to click on or check a box to accept the terms of the waiver, once the participant clicks on the box he or she has accepted the contract or waiver terms and has entered into a legally binding agreement. The benefit of using such “Click-wrap Agreements” is that they often remove many factual questions concerning whether the user had adequate notice of the terms of the waiver and whether he or she agreed to them.

Next, it is important that when using online or electronic waivers sport and recreation administrators always include a statement concerning which jurisdiction or state laws will apply in the case of a lawsuit. The reason this is so important with online or electronic waivers is because you do not want to be defending a lawsuit in an out of state court. A real possibility in today’s electronic age, since most state courts are willing to exercise jurisdiction over out-of state and international businesses if they believe that the business, by operating a website that purposely solicits commercial activity from out of state participants over the internet, has sufficient commercial activity within the state to make jurisdiction reasonable. For example, in the case above, what would have happened if the student injured was from Iowa? Without a statement stating that Minnesota courts had jurisdiction over all disputes, the case could have ended up in the Iowa courts and have had a very different outcome.
As a final word of caution, it must again be noted that if there is anything misleading or wrong with the waiver, a number of courts will void them and allow the lawsuit to continue. To ensure this does not happen, and to take some of the guess work out of using online or electronic waivers, the following checklist is provided.
– The waiver should be clearly titled and descriptive (e.g., Waiver & Release of Liability);
– The waiver should use clear and easy to understand language;
– The waiver print size should be at least 10 point;
– The waiver should not contain any fraudulent statements;
– The waiver should clearly and unambiguously state that the signer is releasing the service provider from liability for injuries resulting from the ordinary negligence of the provider;
– The waiver should contain some statement denoting consideration (e.g., “In consideration for being allowed to participate in . . ., the signer agrees to . . . .);”
– The waiver should specifically identify the parties who are relinquishing their rights and the parties who are protected by the waiver;
– The waiver should be no longer than one page and all substantive terms should be visible and complete without hyperlinks to additional terms;
– The user should not be allowed to click on the accept button without being allowed the opportunity to review the entire agreement;
– The reader should have the opportunity to read the document at their own pace and should have the ability to browse through and to view all the terms of the agreement;
– The waiver should have a statement indicating that the signer read the entire statement
– Accept/Decline buttons must be at the end of the agreement;
– The buttons should clearly state Accept/Decline.

While most of the guidelines listed above should also be followed when writing any type of waiver, the checklist is designed specifically to help sport and recreation administrators write online or electronic waivers.

Attorney John T. Wolohan (jwolohan@syr.edu) is a professor of sports law in the Department of Sport Management at Syracuse University.